Deputy Prime Minister Datuk Seri Najib Tun Razak who is also the Minister of Finance presenting the second stimulus package worth RM60 billion to spur economic activity and help keep the economy from slipping into recession Pic: Bernama
KUALA LUMPUR, March 10 (Bernama) -- The government today unveiled its second economic stimulus package totalling RM60 billion, comprising initiatives and ideas to invigorate vital sectors to maintain the people's welfare and prosperity in the face of the global economic downturn.
Deputy Prime Minister and Finance Minister Datuk Seri Najib Tun Razak, when tabling the package in the Dewan Rakyat, said it would be implemented over two years -- 2009 and 2010 -- and would have four thrusts.
These were reducing unemployment and increasing employment opportunities; easing the burden of the people, in particular the vulnerable groups; assisting the private sector in facing the crisis; and building capacity for the future, he said.
Najib said the government would continue to implement appropriate measures to strengthen the confidence of the people and ease the burden, particularly of the vulnerable groups.
"In view of the deteriorating global economy, the Second Stimulus Package is significantly larger and more comprehensive, encompassing various economic sectors and target groups.
"This includes workers, consumers, investors, small and medium businesses, exporters and unemployed graduates," he said.
Najib, while being open about the severity of the global economic prospects, said he was confident that Malaysia would be able to face this difficult and challenging environment with the spirit of unity among the people, just as the country had successfully overcome several crises in the past.
He said Malaysia could not depend on orthodox economic recovery policies, but must be bold in formulating innovative approaches to deal with the crisis.
"There have been increasing calls by the people for the government and the opposition to set aside political differences and focus on the economy.
"I personally acknowledge these calls and, therefore, urge all parties, from the government and opposition to focus on the economy and the people," he said, inviting the opposition to work together in the effort.
"There are high hopes, when faced with an economic storm, for us to always work together and think of doing the best for the people," he said.
Najib announced the package, regarded as a mini budget, when tabling the Supplementary Supply Bill 2009 for second reading in the Dewan Rakyat.
On Nov 4 last year, the government announced the First Stimulus Package totalling RM7 billion which, according to Najib, was being actively implemented and RM6.5 billion of which had been channelled to projects.
The second package also gives special focus to the people of Sabah and Sarawak, particularly in the provision of infrastructure for which RM1.2 billion is to be allocated to increase economic activities.
Projects and programmes to be implemented in Sarawak include the expansion of the Sibu Airport, deepening works at Miri Port, repair and improvement of infrastructure damaged by floods and upgrading of schools.
In Sabah, the main programmes and projects to be implemented include the Kota Kinabalu Electricity Transmission System, upgrading of schools, roads and bridges, and resolving issues related to health services at the Queen Elizabeth Hospital.
In his speech of an hour and 15 minutes, Najib acknowledged that Malaysia now faced an extremely challenging economic environment in the context of the difficult global economic scenario, and said that the country's Gross Domestic Product (GDP) was expected to be in the range of negative one per cent to one per cent for 2009.
Najib said that though developed countries had announced large economic stimulus packages exceeding US$3 trillion, including substantial amounts to bail out their financial institutions and large corporations, these measures had yet to restore consumer and investor confidence.
He said the United States, the world's largest economy and trading nation, was expected to experience a contraction of 1.6 per cent, the United Kingdom 2.8 per cent, Japan 2.6 per cent, South Korea negative two per cent, Taiwan negative four per cent and Singapore negative 4.9 per cent.
"In fact, Singapore's Minister Mentor (Lee Kuan Yew) envisaged that Singapore's economy might contract 10 per cent this year," he said.
Najib said Malaysia had to accept the fact that as a highly open economy it was likely to be impacted through declining exports in line with deteriorating world demand; sharp decline in the prices of commodity exports; decline in Foreign Direct Investment (FDI) in line with the global recession; and significant decline in Bursa Malaysia due to the global meltdown in equity markets.
To handle the unemployment situation, allocation would be channelled towards creating 163,000 training and placement opportunities in the public and private sectors, sponsoring the cost of Masters and doctorate studies as well as providing tax incentives to employers who engage retrenched workers.
Najib said the government would recruit 63,000 staff to fill vacancies, including 13,000 jobs for contract officers.
Other employment opportunities were recruitment of 4,000 officers on short-term service; 1,000 graduates as contract school teachers; 800 contract workers to strengthen the implementation of "Program Cari" under the Ministry of Women, Family and Community Development; 1,000 contract public health assistants; 4,500 contract enumerators in the Statistics Department for the population census; and 1,700 nurses and health support staff.
Najib said staff on the short-term service with a minimum qualification of Sijil Pelajaran Malaysia (SPM) would receive a monthly salary of RM1,200 while contract graduate teachers would be paid RM2,000.
Under the provision of training and creation of employment opportunities, on-the-job training would be provided for 1,000 unemployed graduates in the financial sector for two years while 2,000 training opportunities and job placements would be provided in government-linked companies (GLCs), particularly in the services sector such as outsourcing, aviation, utilities, health and creative multimedia.
Private employers who employ retrenched workers between today and Dec 31 2010 would be given double tax deduction on the amount of remuneration paid. The amount of remuneration eligible for this deduction shall not exceed RM10,000 per month and would be limited to 12 months remuneration per employee.
Najib also said that the government would undertake to finance tuition fees and research grants up to RM20,000 for every student pursuing doctorates locally. For students in the Masters programme, the government would provide up to RM10,000 per student.
A total of 500 places would be provided for studies at PhD level and 10,000 at Masters level in public institutions of higher learning as well as at Universiti Tenaga Nasional, Universiti Multimedia and Universiti Teknologi Petronas, he said.
The PROSPER Graduate Programme, implemented in June 2005 to assist Bumiputera graduates in retail or distributive business with training, financing and business advisory services, would have its scope expanded to include those with skills and technical certificates, enabling an additional 400 graduates to benefit from the programme, he said.
Najib said the government would also continue to take steps to reduce the dependence on foreign workers by doubling the levy on foreign workers for all sectors except construction, plantation and for domestic maids. The levy would be paid by the employers and not by the workers.
In this connection, he said, the issuance of licences to foreign labour recruitment agencies would be frozen and the conditions for recruitment of foreign workers by existing agencies would be tightened.
Najib said the government would ensure that the vulnerable groups benefited from the Social Safety Net Scheme, besides allocating RM27.9 billion for subsidies in 2009.
He also said that the stimulus package provided for an additional allocation of RM20 million to improve the facilities of daycare centres for the elderly, strengthen the management of women shelter homes and increase facilities for childcare centres.
To assist fishermen affected by disasters at sea, he said, the government would establish a Fishermen's Welfare Fund with an initial allocation of RM2 million, which would be managed by the Fisheries Development Authority of Malaysia.
Najib said that to reduce the burden of retrenched workers, the government proposed raising from RM6,000 to RM10,000 the existing tax exemption given on retrenchment benefits for each completed year of service.
He said banking institutions had agreed to defer the repayment of housing loans of retrenched workers for one year.
To support the initiative of the banking institutions, he added, the government agreed that the interest income related to the deferment of housing loan repayments be taxed only when such interest was received.
The package also provides for RM1.95 billion to build and improve facilities in 752 schools, particularly in rural areas as well as Sabah and Sarawak.
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